Description

This thesis is motivated by the significance of natural shocks
for agricultural households in Thailand, which form the majority
of the country’s poor. It contributes to the existing
literature by providing recent evidence from Thailand, where
current research in this field is limited. Three empirical
studies were carried out to examine the relationships between
shocks, household welfare, and behaviour, using variations in the
measures of shocks and across...[Show more] different contexts.
The first study estimates the reduced-form effects of rainfall
shocks on household income and consumption expenditure, and
examines how farming households respond to such shocks. Two
explicit measures of extreme rainfall events are constructed from
a primary rainfall time series in order to track the incidence of
excessive and deficit rainfall on the basis of the rainfall
variability. The analysis is based on a pseudo-panel of repeated
cross-sectional household surveys conducted between 2006 and
2010, combined with provincial-based measures of rainfall shocks.
The results show evidence of consumption smoothing but not of
income smoothing in which crop income is highly sensitive to
rainfall shocks. Farming households can earn income from off-farm
employment and asset sales in compensation for crop income loss.
Landless households are more affected by rainfall shocks than
better-off households. Dissaving and asset sales are prevalent
options in response to extreme rainfall events.
The second study considers a particular catastrophic event of the
mega flood in 2011 and examines its impacts on household
preferences, subjective expectations, and behaviour. This study
draws on a survey that was conducted in 2014 in four key
rice-growing provinces in Thailand’s central, lower north, and
north-east regions, which were severely affected by the flood.
Experiencing the mega flood made non-flood-prone households more
risk averse, more impatient, and more altruistic. They also
adjusted upward their subjective expectations of future severe
floods and public insurance, while reducing the dependability of
social networks and self-reliance. The flood influenced
households’ behaviour, in that flooded households were less
likely to have savings and to engage in self-insurance
mechanisms, as well as to make productive investments, but more
likely to take out crop insurance.
The third study provides a comparative analysis of multiple types
of shocks by analysing the distribution of shocks, their
consequences, and how affected households cope with different
shocks. Based on a panel survey of rural and urban households
from 2010 and 2012, the results show that natural and health
shocks are the most common shocks and that shocks are not
uniformly distributed across households but vary according to
demographics, livelihoods, and economic status. Imperfect
consumption smoothing is evident in that households cannot fully
insure their consumption against illnesses and economic shocks.
The effects of shocks on household consumption and risk-coping
responses also vary by wealth level. Shocks reduce consumption
expenditure among poorer households but lead to overspending
among richer households. Asset-abundant households are more
likely to resort to their own savings or to deplete assets, while
asset-poor and resource-constrained households prefer to cut
their consumption expenditure or rely on external credit and
assistance from relatives.